Tel Aviv Stock Exchange Ends August Mixed Amid Financial Report Season

The Tel Aviv Stock Exchange concluded August with mixed performance, influenced by the release of second-quarter financial reports. While the main indices, TA-35 and TA-125, experienced slight declines of 0.26% and 0.37% respectively for the month, they remain up significantly year-to-date at 13.96% and 10.73%. The TA-90 index saw a larger monthly drop of 1.02%, resulting in a year-to-date loss of 0.36%.

Sector performance varied, with finance and insurance leading with superior results. The government bond market showed positive trends, attributed to a decrease in risk premiums, moderate inflation, and a strengthening shekel. Israel's July Consumer Price Index rose 0.3%, with an annual inflation rate of 1.5%, fueling expectations of further interest rate cuts by the Bank of Israel. Consequently, the yield on 3-year Israeli government bonds decreased slightly.

In contrast, U.S. two-year Treasury yields rose due to the Federal Reserve's cautious monetary policy. August saw approximately 0.55 billion shekels raised in the primary market, with the majority, about 530 million shekels, coming from the IPO of Avisror company at a valuation of 2.3 billion shekels. This year, 20 new companies have joined the exchange, with a total initial valuation of 33.3 billion shekels.

The corporate bond market remained active, with about 10.8 billion shekels raised through public offerings. Bank Leumi led these efforts, raising approximately 5.3 billion shekels through various bond issuances. Structured bond companies also attracted significant interest, raising about 2.6 billion shekels in August and 24.3 billion shekels year-to-date.

Mutual funds attracted net inflows of approximately 7 billion shekels in August, bringing the year-to-date total to 47 billion shekels. Total assets under management in active and passive funds reached about 840 billion shekels by month's end. Bond funds, particularly those investing in local bonds, saw inflows of 2.1 billion shekels in August, supported by anticipated interest rate cuts. Demand for foreign equity funds also continued, with 2.3 billion shekels raised in August.